Biggest Obstacle to Selling Trade Pact Is Sovereignty

Q  UEBEC, April 22 -- Midway through President Bush's first summit meeting, Secretary of State Colin L. Powell said he was unfazed by the raucous demonstrations that greeted the 34 leaders trying to turn the Western Hemisphere into a single market.

"An old infantryman always remembers what tear gas and pot smell like when you walk in the barracks," he joked with reporters, recalling his days as a young Army officer.

But for Mr. Bush's new administration, the odors may be the only familiar element of a brew of street protests, domestic politics and foreign policy that merged this weekend at the Summit of the Americas.

THE NEW YORK TIMES, April 23, 2001
"News Analysis: Biggest Obstacle to Selling Trade Pact Is Sovereignty"
By DAVID E. SANGER

The meeting represented the third try in seven years to create a giant free-trade alliance from the Arctic Circle to Tierra del Fuego.

As Mr. Bush found, a lot happened at the intersection of trade and politics in the eight years when the Republicans were out of the White House. When Mr. Bush's father left office the term globalization had barely entered the lexicon. NAFTA -- the North American Free Trade Agreement -- was still under negotiation. The Seattle protests of 1999 were six years away.

So starting this weekend, the new president found himself playing what his predecessor once called the "three-dimensional chess" of trade. He knows he must respond to the swelling emotions on the street that captivate the television cameras, at the same time addressing the fears of developing nations that the Free Trade Area of the Americas is a neutral-sounding term for an imperialist world in which the United States sets the rules and gets the benefits.

And more immediately, Mr. Bush must deal with a Congress that is so divided on trade that it is unclear whether the president will get the authority he would need to negotiate the pact he came here to promote.

Nor is it obvious how much political capital Mr. Bush will expend on trade in a year when tax cuts and education are higher on his agenda.

Mr. Bush brushed that aside today when, appearing with several Latin American leaders and the prime minister of Canada, Jean Chrétien, he made his bottom-line case for the trade pact.

Click here to see picture from the newspaper's website:
President Bush with President Fox of Mexico, left, and Prime Minister Chrétien of Canada after the meeting. -- The Associated Press

In a comment unlikely to strengthen his friendships among America's European and Asian allies, he said he was focusing on a regional accord so that "we can combine in a common market so we can compete in the long term against the Far East and Europe."

And he revived one of President Clinton's favorite arguments, that democracy and American-style capitalism are now intertwined. In fact, the communiqué issued today states that any country in the hemisphere that suffers an "unconstitutional alteration or interruption of the democratic order" will be banned from negotiations over a free trade area.

Turning such lofty principles into a real agreement will be a complex task. The biggest problem comes down to one word: sovereignty.

The protesters on the street had any number of complaints. Some came to argue that free trade puts the interests of industry ahead of the environment, or that it does nothing to assure that workers get higher wages and the right to unionize, or that it concentrates wealth in the hands of the rich.

They said NAFTA, which Mr. Bush repeatedly cited as the model for the hemisphere, was actually a disaster for the people who work for low wages in the factories on the Mexican-United States border and for the environment.

But among the serious critics of free trade accords, the fundamental problem is that they have no control over the forces that set environmental or labor rules.

And they believe that they have been excluded from setting those rules, a feeling reinforced by a recent report by the Leadership Council for Inter-American Summitry, a group of academics and economists. It concluded that "the gap between summit promises and accomplishments is so wide as to have created a public crisis of confidence."

Mr. Bush said today that he hoped to address that concern by publishing the text of the lengthy document that will eventually form the basis of the Free Trade Area of the Americas. The idea is to answer charges that such accords are written in secret.

But Mr. Bush made clear that he would not be deterred, and his tone all weekend conveyed the sense that he was willing to entertain ideas about protecting workers or the environment, as long as they did not slow the pace of commerce.

"There are some people in my country that want to shut down free trade," he said. "And they're welcome to express their opinions." But, he added, "it's not going to change my opinion about the benefits of free trade."

Sovereignty, though, is not only a worry on the street. It is a concern among Latin America's elected leaders as well, and several made clear that they planned to proceed with enormous care.

Brazil's president, Fernando Henrique Cardoso, showed no more enthusiasm for a quick free trade area than he has before. His country has deep doubts that the United States would really allow Brazilian orange juice, steel, shoes and other products into the American market with virtually no duties, competing with American workers.

Venezuela's president, Hugo Chávez, a populist whom Mr. Bush approaches warily, took exception to several clauses in the communiqué, indicating problems to come.

Even Canada objects to provisions that would let international investors challenge any nation's laws on the grounds that they threaten the profitability of those investments. Under the NAFTA, United Parcel Service is already challenging Canada's subsidies for its postal service.

Such concerns are only going to get more intense. Latin America has made progress in the last decade, but its many American-inspired economic reforms have had limited effect. Growth has been a modest 3 percent, unemployment is up and a third of the population of 180 million people earns $2 a day.

For Latin leaders, "selling this at home won't be easy," said Richard Feinberg of the University of California, a former Clinton administration official who studied the topic.

It will not be easy for Mr. Bush, either. Congress declined to give Mr. Clinton the authority to negotiate trade agreements that cannot be amended when they reach the House and Senate floors, where lobbyists from every industry will try to reopen negotiations. Mr. Bush said today that he was committed to getting such authority this year. The 33 countries he is negotiating with are waiting to see if he succeeds; only then will serious bargaining begin.

Mr. Bush's trade representative, Robert Zoellick, wants to bridge the gap between Democrats who insist that any trade accord impose penalties on countries that fail to protect workers and the environment, and Republicans who see such requirements as a form of protectionism.

Mr. Zoellick said he wanted to include "incentives," not sanctions, for countries to respect workers' rights and the environment. That is unlikely to satisfy Congressional Democrats. But any provisions that imposes sanctions are bound to raise cries from Latin America.

So Mr. Bush is going to have to convince Congress that he is not giving up America's power to shape the rules, and convince the Western Hemisphere that he is acting as a "humble" superpower, the phrase he has used many times.

That will take years. Along the way, he and Mr. Powell are likely to smell some more tear gas.

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